"The Intra-circle Business Is the Survival of the Basic"

Hughes Tele.com, private basic service operator in the states of Maharashtra

and Goa, is gearing up to unveil an optical fibre network in Mumbai which will

help deploy apart from voice telephony, a host of value-added services including

high-speed Internet and VPNs. While a good start is being made, Prakash Bajpai,

CEO, is in no way flattered. He shares his company’s concerns with

Nareshchandra Laishram.

How would you be different from the incumbent?



A. In every way we have been different. We have a different orientation. Our

technology platforms are different. The range of services and applications that

we create are different. The service organization and the way you deliver

services to the customers, that is different. And the area that we are choosing,

we are catering to the high-potential customers in the initial period.

But won’t fibre optic cables improve things

significantly?



A. Not an inch of the1,70,000 km of fibre laid has been laid in the

last-mile. There is a lot of focus on international long-distance, the gateways,

the landing stations, DLD, etc. Many private gateways are coming up and plenty

of investment is going into submarine cables. Long-distance is a little larger

problem but that will be handled. But the problem of access will take a long

time to overcome. The efforts and investment needed in access are huge. Eighty

percent of the total investment in telecom goes in the last-mile. So, if you

require Rs 30,000 crore for long-distance upgrades, you require almost Rs

4,00,000 crore to improve the last-mile infrastructure.

Why are investments coming down to this trickle?



A. It is because we make policies that are not conducive. Our tariff system

is so skewed. In long-distance you make one-tenth of the investments in basic

services and yet have 90 percent of the margins. The notion was that since

long-distance is used by the rich, so let’s make it costly and local is used

by the masses, so let’s subsidize that. So, we are a business that has a

burden of running the local business that requires subsidies to be provided by

long-distance business. Without the subsidy, this business becomes totally

unviable.

Does that mean that only those basic service providers who

run long-distance services also will survive?



A. That is why the intra-circle business is really the survival of the

basic. There is still so much lobbying going on for opening up intra-circle

calls to long-distance service providers. It is a no-brainer. There are some

vested interests that want to take advantage of the current tariff system. They

will make a lot of money in inter-circle calls with a small investment. But they

are not satisfied. They want to take away the margins of the basic service

provider’s intra-circle business too. This is where we, the ABTO, clearly

said, "If you throw open intra-state long-distance, you can kiss goodbye to

the country’s infrastructure development." Then nobody would invest in

basic. Would you?